CPFO Treasury and Investment
Management UPDATED ACTUAL Exam
Questions and CORRECT Answers
Treasury management - CORRECT ANSWER - involves the management of cash from
the time revenue is earned to the time an expenditure payment clears the bank
All cash management decisions should be made with considerations of - CORRECT
ANSWER - legality, safety, liquidity, and yield
Treasury management includes the systems and operating cycles - CORRECT ANSWER -
Establishing policies - CORRECT ANSWER - is part of the systems cycle
Forecasting cash flows is part of the - CORRECT ANSWER - operating cycle
Both internal and external players are included in - CORRECT ANSWER - treasury
management processes
Risk - CORRECT ANSWER - is defined as the possibility of loss
Normally, the greater the risk taken, the - CORRECT ANSWER - greater the potential
return
Treasury management goals are constrained by - CORRECT ANSWER - politics, past
practices and unwillingness to change, and the amount of risk
The most common cash management policy is - CORRECT ANSWER - the investment
policy
,Politics - CORRECT ANSWER - can play a part in the selection and maintenance of
banking relationships
More than one bank may be selected to maintain accounts - CORRECT ANSWER -
Banks may be rotated periodically - CORRECT ANSWER -
Banks may be selected via - CORRECT ANSWER - competitive bid
Selection of a bank through competitive bid is usually - CORRECT ANSWER - the most
cost effective and the decision is based on business principles rather than politics
Lockbox collection systems allow banks to - CORRECT ANSWER - collect directly from
a post office box, open, verify, and process the payment.
Zero balance accounts - CORRECT ANSWER - allow checks to be presented for payment,
creating intraday overdrafts that are later swept out
Short-term credit services - CORRECT ANSWER - have a duration of less than one year
Additional interest earning, additional bank services, and reduced service charges may be
obtained through competition - CORRECT ANSWER -
The additional costs incurred by undertaking a competitive bid process are offset by -
CORRECT ANSWER - the additional interest earning and increased services offered by
the bank for the same money
Governments should be careful to request only services which are truly needed - CORRECT
ANSWER -
, Banks should be requested to submit their annual reports - CORRECT ANSWER - for the
past 2 years
Cash flow forecast - CORRECT ANSWER - is a schedule of receipts and disbursements
over a given time period
The first step in preparing a cash flow forecast is - CORRECT ANSWER - identifying all
finds departments and financial data in a government
A simple rule of thumb to evaluate separately on those revenue sources that - CORRECT
ANSWER - individually account for at least 15% of government tool revenues
LGIPs (Local Government Investment Pools) - CORRECT ANSWER - are a short-term
investment vehicle used by governments
Moving average is - CORRECT ANSWER - the most common forecasting method
Cash flow forecasting - CORRECT ANSWER - is most commonly done at the fund level
Most common cash flow forecasts are - CORRECT ANSWER - monthly
When considering the type of forecast to use, the type of information available, time period, and
level of detail needed are key factors - CORRECT ANSWER -
Cash available for investments - CORRECT ANSWER - = beginning cash + revenues -
expenditures
The moving average method - CORRECT ANSWER - looks at past history
Management UPDATED ACTUAL Exam
Questions and CORRECT Answers
Treasury management - CORRECT ANSWER - involves the management of cash from
the time revenue is earned to the time an expenditure payment clears the bank
All cash management decisions should be made with considerations of - CORRECT
ANSWER - legality, safety, liquidity, and yield
Treasury management includes the systems and operating cycles - CORRECT ANSWER -
Establishing policies - CORRECT ANSWER - is part of the systems cycle
Forecasting cash flows is part of the - CORRECT ANSWER - operating cycle
Both internal and external players are included in - CORRECT ANSWER - treasury
management processes
Risk - CORRECT ANSWER - is defined as the possibility of loss
Normally, the greater the risk taken, the - CORRECT ANSWER - greater the potential
return
Treasury management goals are constrained by - CORRECT ANSWER - politics, past
practices and unwillingness to change, and the amount of risk
The most common cash management policy is - CORRECT ANSWER - the investment
policy
,Politics - CORRECT ANSWER - can play a part in the selection and maintenance of
banking relationships
More than one bank may be selected to maintain accounts - CORRECT ANSWER -
Banks may be rotated periodically - CORRECT ANSWER -
Banks may be selected via - CORRECT ANSWER - competitive bid
Selection of a bank through competitive bid is usually - CORRECT ANSWER - the most
cost effective and the decision is based on business principles rather than politics
Lockbox collection systems allow banks to - CORRECT ANSWER - collect directly from
a post office box, open, verify, and process the payment.
Zero balance accounts - CORRECT ANSWER - allow checks to be presented for payment,
creating intraday overdrafts that are later swept out
Short-term credit services - CORRECT ANSWER - have a duration of less than one year
Additional interest earning, additional bank services, and reduced service charges may be
obtained through competition - CORRECT ANSWER -
The additional costs incurred by undertaking a competitive bid process are offset by -
CORRECT ANSWER - the additional interest earning and increased services offered by
the bank for the same money
Governments should be careful to request only services which are truly needed - CORRECT
ANSWER -
, Banks should be requested to submit their annual reports - CORRECT ANSWER - for the
past 2 years
Cash flow forecast - CORRECT ANSWER - is a schedule of receipts and disbursements
over a given time period
The first step in preparing a cash flow forecast is - CORRECT ANSWER - identifying all
finds departments and financial data in a government
A simple rule of thumb to evaluate separately on those revenue sources that - CORRECT
ANSWER - individually account for at least 15% of government tool revenues
LGIPs (Local Government Investment Pools) - CORRECT ANSWER - are a short-term
investment vehicle used by governments
Moving average is - CORRECT ANSWER - the most common forecasting method
Cash flow forecasting - CORRECT ANSWER - is most commonly done at the fund level
Most common cash flow forecasts are - CORRECT ANSWER - monthly
When considering the type of forecast to use, the type of information available, time period, and
level of detail needed are key factors - CORRECT ANSWER -
Cash available for investments - CORRECT ANSWER - = beginning cash + revenues -
expenditures
The moving average method - CORRECT ANSWER - looks at past history
